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Narrowing the price gap between hearing aids and PSAPs

The hearing aid industry offers pricey hearing aids for people with ‘defined’ hearing loss.  The FDA wants you to understand that it regulates hearing aids – which it defines as helping the medical condition of hearing loss. The FDA then observes that Personal Sound Amplification Products (PSAPs) are “sound amplifiers for consumers with no hearing loss who want to make environmental sounds louder for recreational use.“ Recreational? Hearing aids that they do regulate are now made by a small number of companies and are sold with audiologist services for $1000 up to $4000 per device – most people need two – they have a lifespan of up to 7 years.   That price includes a hearing test, fitting, initial batteries and more.

Why do hearing aids cost so much? According to hearing industry experts, the price differential is based on the inclusion of audiologist services available at no additional charge for multiple years of ownership. And in a few other words from AARP, a very few companies control the bulk of the market.  And although it has been recommended to decouple the product from services, so far, that has not happened, perhaps related to the efforts of those few companies. Retailers like Walmart and Costco all sell hearing aids – coupled with Costco-provided audiologist services – Costco’s site offers its own branded for $1600 per pair. According to one industry expert: "Every global manufacturer has an entry level product that wholesales for under $300, so even with the 1/3-2/3 pricing model, a pair should cost less than $2,000."

As hearing aid prices are further disrupted, the PSAP and other hearables disrupt the industry.  If Costco is pushing the hearing aid industry price down, at some point that price meets the upper end of the PSAP market of $500/pair from PSAP makers like Clarity, SoundWorld Solutions or Tweak Focus. The underlying technology in hearing aids and that of Personal Sound Amplification Products (PSAPs) is not different. The go-to-market channels, however, are quite different. Retail stores and online websites offer PSAPs for buyers who adjust the device themselves – which the FDA calls the ‘audio version of reading glasses.’ And Consumer Reports calls them ‘hearing helpers.’ But are they really? Or are they hearing aids in disguise because the FDA does not currently regulate them? Maybe they are hearing aids that you adjust yourself? How do they sync up with the more recently introduced 'hearables' which encompass a plethora of firms?

Consider that this terminology dance must mystify consumers.  Note that hearing aids are not covered by Medicare – nor are PSAPs -- though they are partially reimbursed through some Medicare Advantage plans. Note that one in three between age 65 and 74 has hearing loss, and nearly half of the 75+ have some significant level of hearing loss. Note that hearing loss has been linked to dementia and to social isolation – which has been connected to poorer health outcomes.  (Furthermore, wearing hearing aids has been linked to fewer hospital visits.)

Cut to the chase – the FDA should get out of the consumer’s way. Regardless of what it is called and how defensive the government agencies are, improving ability to hear among older adults is a health and quality-of-life positive -- and could be related to lowering healthcare costs. The companies in this industry (Hearing Aid and PSAP) need to help the FDA help the older consumer who lacks either device. Decouple the product from the services, market them as must-haves, allow consumers to make their own choice of where to buy and with what service they need, and track price and competition, measuring the numbers of people who report improvement in quality of life, health status, and social engagement.

Comments

Inexcusable that traditional Medicare does NOT cover hearing loss.  A glaring example of the "medical necessity" standard that has governed Medicare Coverage Determinations for far too long.  In a value-based healthcare system that is responsive to the PATIENT rather than providers' needs, hearing aids WOULD be covered.  Let's hope Medicare Advantage plans start to include hearing aids in their plan design.

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